Investment Strategies

Investment Implementation

At SKWealth, we use a combination of Strategic Asset Allocation (SAA) and Tactical Asset Allocation (TAA) strategies to manage risk and return in concert with a client’s financial planning goals.

SAA is applied to asset classes, has long-term goals, and considers risk aversion when deciding asset allocation. Each strategic asset class is assigned specific policy targets, with allowable ranges that provide flexibility.

TAA is a dynamic strategy that actively adjusts a portfolio’s SAA based on short-term market forecasts. Its objective is to systematically exploit inefficiencies or temporary imbalances in equilibrium values among different asset or sub-asset classes. Over time, strategic long-term target allocations are the most important determinant of total return for a broadly diversified portfolio.

TAA attempts to add value to SAA by overweighting those asset classes or sub-asset classes that are expected to outperform on a relative basis and underweighting those expected to underperform. In a TAA model, financial and economic variables (“signals”) are used to predict performance and assign relative short-term asset-class weightings. TAA can add (or subtract) value, if designed with the appropriate rigor to overcome significant risk factors and obstacles unique to the strategy.

SKWealth may design, revise, and reallocate a client’s custom portfolio. Investments are determined based upon the client’s investment objectives, risk tolerance, net worth, net income, age, time horizon, tax situation and other various financial planning and suitability factors. Restrictions and guidelines imposed by the client may affect the composition and performance of custom portfolios (as a result, performance of custom portfolios within the same investment objective may differ and the client should not expect that the performance of his/her custom portfolios will be identical to any other individual’s portfolio performance).

We inform all clients that no model and measure will ever have the ability to capture or foretell every extreme event in the financial markets. That is why it is essential that we combine the use of qualitative criteria for investment management processes with quantitative performance-evaluation metrics. We bring together dynamic correlation, target risk construction, fundamental and technical analysis, as well as mean reversion and historical market cycles to build portfolios to give clients a more consistent glide path to meeting their financial goals.

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